Finally, we lay out the budget. Originally, we had stipulated a 10 percent of sales for a budget of $20 million that, again for the sake of time, we’ll use only in advertising. In real life, this 10 percent would have to cover advertising, promotions and other deals.
Women, who represent 55 percent of the profits of the company, get roughly $11 million; men get $6 million; and the rest keep $2.8 million.
A budgeting worksheet might look like this:
The media planner would analyze channel by channel to determine the minimum budget needed to achieve R/F objectives and build the budget one channel at a time.
In the words of Roger Godbeer, worldwide media director at Colgate: “and when the money runs out, it runs out,” meaning the next channel doesn’t get funded.
TOE is not a speedy or simple process. It requires a lot of analysis, research and calculations. In my experience, it takes the better part of two to three weeks to go through the entire process. Subsequent years are easier, of course, as the heavy lifting is already done. On the other hand, if you are the director of marketing or CMO of a company, your mortgage payments, your kids’ dentist, your car, your vacation, they all come from that company. It stands to reason that you would want to invest some time, at least once a year, to make sure that the company’s marketing and advertising plans are well-written.
The Fear of Being Right
One of the things I found early on in my career is that people have a fear of being right, if being right also means being different. And I saw this applied time and again:
The associate media director at Colgate Mexico once told me, with a straight face, that my analysis for putting Wildroot (a hair gel) in pulp magazines was 100 percent accurate, but that, because they had money, they would rather buy television. This was in spite of television being five or six times costlier on a CPM basis for the target. Mercifully, he was fired that week.
- The director of marketing of SCJ in Mexico once told me, again with a straight face, that my analysis for cable for Glade was 100 percent accurate but that he was not going to approve cable “because he didn’t like cable.” Thankfully, he was shifted to director of sales.
- The head of advertising of one of the MBA programs at FIU once told me – and again, all of these people say these things with a straight face – that in spite of their previous year’s media mix not working at all, my analysis and proposal were “too scary” and that they would rather continue doing what they did last year, even with being conscious that it did not work.
So early on I also learned that if you do your analysis:
You know (to a working degree of certainty) where your sales are coming from
- Who is buying your product (and where, when, for how much)
- How to reach these consumers properly
- What message to use
You should just do it.
Other articles by Marcelo:
50 Ways to Kill Your Lover?